>> steve: angie, before we go, congratulations, for your work at unicef. >> brian: you're an ambassador there. in the after the show show, we'll talk about spying on your kids. see you tomorrow. bill: you can pick that up after the show show. good morning, everybody. on this monday are this signs of a compromise as we head for the fiscal cliff? senator lindsay graham, one of the latest high-profile republicans that says he will break the longstanding pledge regarding taxes and says he will do it for the country, but only if democrats are willing to make reforms on entitledment programs, medicare and medicaid and social security. that is big if. good morning, hope your turkey was great. martha: good morning, everybody, i'm martha maccallum. you've got this. congressman peter king and

now senator bob corker say they will ignore the decades old pledge that was signed by 241 house members and senators. he says he believes it is a huge game-changer. >> when you're $16 trillion in debt the only pledge we should make to each other is to avoid becoming greece. republicans should put revenue on the table. we're this far in debt. we don't generate enough revenue. capping deductions will help generate revenue. raising tack rates will hurt job creation. bill: this is the heart of the matter. stuart varney, host of "varney & company". morning to you, sir? >> this is a real shift. one of the two sides had some movement in their position on the tax side of the debate. that side is the republican side. as you heard there from senator lindsey graham, other, and other republican, they are now prepared to accept getting more revenue from the rich.

not higher tax rates on the rich but getting more revenue from them by capping deductions. there has been no movement on the other side of the aisle. democrats like senator carl levin are still sticking to raise tax rates on the rich. the president will hit the road this week again demanding higher tax rates on people making more than $250,000 a year. there has been some movement on the republican side, bill. bill: let's get to democrats in a moment. i want to be clear on this what these republicans are talking about is revenue. that is tax reform. there is a big difference between that and a tax rate being changed. explain that. >> that is correct. what the republicans want to do, certainly senator corker this morning said, cap deductions. $50,000. that is all the deductions you can take. that is how you bring in more revenue from wealthy people. as opposed to raising being at that rates. income tax rates on the rich, that is the president's proposal. there has been shift on how you get more money out of

wealthy people. bill: we heard from leading republicans on this mitt romney campaigned on that but what have leading democrats said about entitlement reform on medicare, medicaid, social security? >> you have used an important word there, reform. entitlement reform. i have not heard a plan for real structural reform from the democrats side of the aisle. they propose to raise more money from the rich which pays for some of the entitlements which we now enjoy but reform, structural reform, changing the way these entitlement programs are actually run, i have not heard that from the democrats. bill: interesting. dick durbin suggested perhaps they need to talk about this we'll see further on that from their side very soon. stuart, thank you. >> bill. bill: see you at 9:20 on fbn. stuart varney with us. here's martha. martha: big word reform, in taxes and entitlements. will that happen? senator graham is not the only republican that says he

believes something needs to be done to avoid the fiscal cliff. >> i think everybody should be on the table. i am myself am opposed to tax increases. the fact is the speaker and majority leader and president will be in a room trying to find the best package. i'm not going to prejudge it. saying we should not take ironclad positions. i have faith in john boehner putting together a good package. he is very conciliatory in his language. >> i do am opposed to raising tax rates but i do believe we can close loopholes. >> they have to go up real tax rates or effective tax rates. there are ways to do that. secondly we have to close significant loopholes. martha: all right. what are we hearing here? are he starting to hear a little bit of common ground? a high level meeting as you just heard on the fiscal cliff is expected this week at the white house with the president getting involved. nobody knows exactly when that will take place and who all of the players will be. we'll talk to senator sessions. bill: listen carefully on

the language as we work through this. nearly all americans will see their taxes go higher if congress does not reach a deal by the 1st of january. 158 million americans would be affected. every household in the country would pay 3500 more in taxes in 2013. 88% of households would see their taxes rise. martha: even the white house is warning that the uncertainty of a potential tax hike could hurt american retailers during this deholiday shopping season. white house economists saying quote, as we approach the holiday season which accounts for 1/5 of industry sales, retailers can not afford the threat of tax increases on middle class families. bill: as we learn more about what each side is kill willing to concede in this argument president obama meets with leaders later in the week. this morning we'll meet with house majority leader eric cantor live in "america's newsroom.". next hour we talk to him

where these negotiations are. how much each side is willing to give up and what they want in return. ultimately will they get a deal? eric cantor coming up next hour. martha: it is all in the language and semantics of these discussions. as u.s. lawmakers continue all this wrangling over some kind of budget deal we work towards here at home, european lawmakers are meeting today on their financial crisis, a lot of which presented the picture americans would like to avoid. ministers from 17 countries will get together. they try to hammer out a plan that will prevent greece from going bankrupt. they have been trying to agree on a new solution there for weeks. also overseas this morning there are major developments to tell you about in egypt. new protests breaking out after egyptian president mohammed morsi announced far-reaching powers placing himself above any government law. that has sparked the violent clashes that he see here on the streets and dozens of protests but the country's justice minister now saying

there is some sort of resolution on all of this imminent. steve harrigan joins us now streaming live from cairo with the latest. steve, do you think that we could see some kind of compromise today on this? >> reporter: martha, we are certainly hearing sound from the presidential teamsh to reace opposition in a push for a possible compromise. what we're likely to see in the next 90 minutes here is a meeting between egypt's president and some top judges here inside cairo. judges across the country have gone on strike. they say the president tried to put himself above the law. we could see some scaling back from a presidential team that has been surprised by the angry reaction to the move by president morsi, martha. martha: such a key moment for the future of egypt. what happens if they fail to reach any kind of compromise here? >> reporter: well for the past four days we've already seen violence in the streets not only here in cairo but other egyptian cities as

well. more than 500 people wounded, one person killed. if there is no compromise today, we could see million man marches on both sides of the issue tomorrow in cairo. when you have a million people on one side, a million on the other, angry at each other the chance for violence extremely high in cairo without compromise today, martha. martha: it sure is. the rumblings are being felt in so many places across the middle east right now. thank you very much, steve harrigan. the question is, are we seeing more of an islamic state forming in the post-mubarak egypt? and what does that mean for is cale and the -- israel and rest of the middle east? former ambassador to the u.n. dan gillerman will be with us moments away. he will give us his perspective coming up. bill: a surprise announcement from israel. president ehud barak says he is quit politics but will stay on after the january elections in israel. often seen as a moderating

force and in considering possible military action. he is 70 years old. he says he wants to spend more time with his family. that news out of israel. martha: it is a very busy morning here in "america's newsroom.". ahead evidence iran has used the recent israel-gaza crisis as a bit of distraction from the rest of the world. we have details on secret operations ahead in a fox news exclusive. bill: was this a white house cover up after the days after the attacks in benghazi and the days before? there are new allegations from leading republicans on that. kt mcfarland will break it down. >> it is assumed the proportions of any other major scandal in this town. there are many layers to the onions. there are all kinds of questions that have been raises i'm only in my 60's...

i've got a nice long life ahead. big plans. so when i found out medicare doesn't pay all my medical expenses, i got a medicare supplement insurance plan. [ male announcer ] if you're eligible for medicare, you may know it only covers about 80% of your part b medical expenses. the rest is up to you. call and find out about an aarp medicare supplement insurance plan, insured by unitedhealthcare insurance company. like all standardized medicare supplement plans,

it could save you thousands in out-of-pocket costs. call now to request your free decision guide. i've been with my doctor for 12 years. now i know i'll be able to stick with him. you'll be able to visit any doctor or hospital that accepts medicare patients. plus, there are no networks, and you never need a referral. see why millions of people have already enrolled in the only medicare supplement insurance plans endorsed by aarp. don't wait. call now. martha: welcome back. we're learning a little bit more this morning about a gas explosion that leveled a strip club and injured 21 people in massachusetts. investigators say that a

columbia gas employee accidentally punctured a pipe checking out a leak. about an hour later the pipe burst. >> been in this business for, i hate to admit 40 years. i have never seen anything like this in my career. martha: fortunately the buildings in the area had already been evacuated before that explosion. about a dozen firefighters though are among those who were injured in this blast. more than 40 buildings, look at that, were damaged. many of them were leveled. three have been condemned. bill: there are new allegations now of a high level cover-up over the events leading to the deadly terrorist attack in benghazi, libya. senate minority whip jon kyl making that suggestion yesterday on the talk shows. >> i think there are three questions that have to be answered. why weren't the warnings about the need for security heeded. why weren't the requests for help during the terrorist

attack answered? and why did the administration think it had to cover up all of the things that occurred before by putting out to the american people a narrative that i think will turn out to be absolutely false. bill: three critical questions there. kt mcfarland is our fox news national security analyst. good morning to you. is senator kyl onto something there? >> they have lied throughout. they denied security requests prior to. they denied requests for reinforcements during the attack and they continued to cover up about it. now the question is, they had so many different stories you don't know what happened. now the question i have then have, is not what happened, why did it happen? why did they feel they had to cover up from the very beginning? because, i think their entire middle east policy turned out to be abject failure. bill: if that were the case, that would have to be a decision made in the early hours of this attack in benghazi, would you agree with that? >> absolutely. now here's why. here is the mind set they

had going into this. everything that george bush did the obama administration said we'll do the opposite. if george bush led from the front we'll lead from behind. george bush went in on the ground from iraq, we'll go in from the air in libya. george bush used contractors to provide security. we use the libyan guys to provide security in libya. the problem was the libyans weren't up to the job. the administration looked at all these countries. they helped topple dictators, now they were dictators but pro-american dictators and kept peace with israel in place 40 years. now what are you seeing? country after country in chaos or electing anti-american, islamist muslim brotherhood leaders. bill: what you're arguing they took all the decisions and flipped them on their head 180 degree turn. >> yeah. bill: how is that working out. >> not very well but they have gotten away with it so far. you and fox news have been carrying out the call but no other mainstream media is

paying attending. they didn't pay attention until it became a sex scandal with david petraeus and everybody paid attention a little bit but mostly about the sex scandal. here we are 10 weeks later we still don't have any explanation what happened, why it happened or who did it. ultimately there will be hearings. people will come forward and you will hear what really happened. will it be too late? the bigger question to me is why is the middle east now in flames. bill: that is a regional question you say changed entirely. what you argue we're on the road to losing entire middle east. >> president said we want to pivot to asia. we're getting out of the middle east. we gotten out of iraq. we have bases there but slowly and surely we're withdrawing from that part of the world. what is taking our place? all the countries relied on us we have america backing us up. they will make accomodations to the growing regional power which is iran and they will worry about the muslim brotherhood in their own countries. just watch.

jordan will be next. bill: jordan next? amman, jordan? >> amman, jordan. a monarchy. a country that had a peace agreement with israel. they have a muslim brotherhood, very active in jordan. there are now protests against the king. bill: it is true there is a power vacuum in that region of the world. back here though, senator mccain was talking about susan rise. >> yes. bill: owe is suggesting now she should testify because we need to hear her out. now some have, paed that suggested that he has softened his language. do you see it that way? >> no. i think what he wants to do is get susan rise rise in confirmation hearings. because if she has confirmation hearings, what is the first question, who gave you the talking points? who wrote the cia memos? she will be under oath and have to tell the truth. bill: lindsey graham was out saying i blame the president above everybody else what happened in libya. >> i think what the administration wants to avoid congressional hearings of any sort what really happened. bill: is that possible? >> you bet it is, if they

have a confirmation hearing of secretary rice the first question she will be asked who wrote the talking points for you? why did you go out even days later and obvious to every housewife in america it was terrorist attack? why did you go out and continue to blame a youtube video? why did you continue to say it was a flashmob that got out of control. bill: kt, thank you. there are more questions as you continue to scratch the surface what is developing into a changing region. good to see you there. martha, what is coming up next? martha: a topic raised by kt with your talk moments ago, unprecedented power grab perhaps underway by the muslim brotherhood that backed egyptian president mohammed morzsy there. we'll talk about that. are we seeing the arab spring may be crumb wling and a new islam state rising? former israeli ambassador to the u.n. dan gillerman is here next. bill: a new study has grim

numbers for kids who love the old bounce house. there she goes. >> oh, my god. ay, now here's our holiday gift list. aww, not the mall. well, i'll do the shopping... if you do the shipping. shipping's a hassle. i'll go to the mall. hey. hi. y'know, holiday shipping's easy with priority mail flat rate boxes from the posl service. if it fits, ithips anywhere in the couny for a low flat rate.

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bill: so for your shopping this holiday season bounce houses are becoming a stable at parties and family gatherings for the kids but the injuries apparently are on the rise as well. [shouting] >> oh, my god. bill: that is going to leave a mark. that is not what you want to happen. a new study says the number of kids treated for bounce houses, injuries, rather, doubled from 2008 to 2010. the injuries include fractures and sprains and head injuries from false and collision with other jumpers inside. the study's author say the new numbers underscore the

need for better safety guidelines or fewer kids inside the bounce house. martha: all right. let's move to overseas news now. with this fox news exclusive, iran apparently attempting to fly under the radar as world media focused on the conflict between israel and hamas in the gaza strip in the last 10 days. so fox news learning that iraq is once again allowing iran to use their airspace to rearm syria's president in his fight against the rebels. leland vittert has been on this story now. he joins us live from jerusalem. leland, what do we know here? >> reporter: martha, it is no secret that iran wants to keep president bashar assad in power there in syria but they're becoming increasingly sneaky how they are getting him weapons, ammunition, other things to continue the fight against his own people. western intelligence sources confirm this video shows cargo planes that have landed from iran inside syria flown by iraqi airspace. despite very intense u.s.

pressure to stop those flights. they land. they off-load and the people you are watching our sources tell us are iran revolutionary guard corps members helping the syrian regime. according to our sources the revolutionary guard used all media attention that happened in gaza, no one is talking about syria for two weeks to increase the flights significantly and continue to supply president assad because they say he is running out of ammunition, especially artillery shells for being able to hit syrian cities. what we also learned this is turning into a little bit of a game of cat-and-mouse because the iraqis under u.s. pressure are inspecting those planes. except they're inspecting from syria to iran empty, rather than too iran to syria when they have all the weapons aboard. martha? martha: what is interesting. why does iran want to resupply the assad regime? >> reporter: iran is playing

for time. the longer syrian civil war goes on the less attention focused on the iranian nuclear program, that is number one. number two, president assad supports hezbollah. that is a key iranian supply route and proxy going on there. the last thing iran wants to continue the sphere of influence around the mediterranean where they have a deepwater port. we're also hearing that hamas and islamic jihad here in the gaza strip are asking iran to resupply them with weapons, specifically the rockets and other things that were that eight-day israeli bombing campaign. so now the iran yage regime will figure out what smuggling route they can use for that to get the weapons into gaza. martha? martha: it is clear the more unrest in that area the more cover it provides for iran and it benefits them in many ways. leland, thank you very much. leland vittert. bill: a major headline as we start a new week here. also this. what needs to be done to avoid that cliff. is it all about raising taxes or should entitlement

programs like medicaid, medicare and social security be on the table? alabama senator jeff sessions is live here with his take in a moment. martha: plus the record powerball jackpot now up for grabs, bill hemmer. get your ticket. do you have your ticket yet at home? we'll be right back. >> lucky, lucky, lotto win.

martha: a compromise possibly in the works on the so-called fiscal cliff as several top republicans say that they would be under certain circumstances willing to break a long-standing pledge on raising taxes. the move comes ahead of a second meeting expected this week with the leaders from both sides and potentially president obama as well in that meeting. so the democrats have suggested a little bit over the weekend they might be willing to concede on several key issues in return for higher taxes or revenue. watch those words though. listen to this. >> let's make sure that revenue is an integral part of deficit reduction. yes, from my side of the table bring entitlement reform into the conversation. social security, set aside. doesn't add to the deficit but when it comes to medicare and medicaid, protect the integrity of the program but give it solvency for more and more years. martha: alabama republican jeff sessions is the ranking member on the senate budget

committee. senator sessions good morning. good to have you here today. >> martha, thank you. martha: a lot of talk this morning after these sunday shows and watching both sides talk about this fiscal cliff about who seems to be moving and in what direction. what are you hearing, what are you hearing from lindsey graham who says, quote he is willing to break that pledge on taxes under certain circumstances? what are they really saying? >> i'm not sure what they're saying. there's a lot of this talk going on. i don't know who is speaking for the republican party. the house of representatives where you have a substantial republican majority but the truth is that this country does not need to go through this fiscal cliff which is fundamentally a huge tax increase and very little spending cuts. so we're facing this huge automatic tax increase that needs to be changed and it is going to take all of us working together because it would damage this economy if we have this kind of huge tax increase. but our democratic colleagues, all they want to talk about is, more taxes,

more taxes, more revenue. they will not telling us where the money is going? they're not assuring that the money will be used to pay down the debt like it is suggested. so we need to see those numbers, what they planned, before any discussion is appropriate it seems to me. martha: you know, i mean, does take it from both sides. if you look at the republican side, basically they want to see cuts in spending and real entitlement reform and perhaps revenue that comes from the relief of some loopholes that are out there so that, bob corker i know has suggested maybe there be a $50,000 cap on the amount of deductions you can take in your taxes. republicans want to get there that way, not by raising any rates, correct? does that stand steady, that thought? >> i think that's a lot, where a lot of our members are. if you can simplify the tax code. make it more flat, more like a flat tax. eliminate all kinds of loopholes and gimmicks and

actually increase revenue without raising the top marginal rate which most economists say would hurt this economy if we were to do it. we need to create growth which creates jobs, not damaging growth by huge tax increase. >> gotcha. >> but what i would like --. martha: go ahead. >> what i'm concerned about is, where this money would be going. they say it's for deficit reduction but the president's budget that he submitted to us in january would increase spending another 1.4 trillion whereas he is proposing now i think 1.6 trillion in new taxes. martha: right. >> if our taxes are just to spend for more spending, i think the american people need to say no. you need to bring your house under control before we send you another dime. martha: let's listen to senator carl levin because we're all sort of looking for words in the tea leaves here that give us indication where the consensus might come from. here is what he said. >> they have to go up real

tax rates or effective tax rates. there are ways of doing that. secondly we have to close some significant loopholes. >> all right. so he is saying get rid of loopholes and raise the effective rate. when i hear him say the effective rate, that sounds like he could be talking about revenue that would be gained by changing the tax system a little bit. do you hear some sort of possible groundwork in there? >> well, yes. i think we are, that the kind of talk we've got to have but really importantly, martha, has there been any talk about reducing spending? any real serious discussion about that? and what will this new revenue be used for? so i have objected to this idea we'll have some secret negotiations going on right now which i and 90 plus percent of our members of congress are not a part of. and it will be plopped down right before christmas day

and we're going to be demanded to vote for it? the american people need to see congress function. they need to hold us responsible. they need to see this plan well in advance of the time it is voted on. this idea of holding these things off till the last crisis minute is wrong. martha: i hear what you're saying. >> the american people need to speak out on that. martha: i hear what you're saying. there is a lot of talk that is being put out there about the pledge that was signed, that grover norquist orchestrated pledge that was signed by so many members to not raise taxes under any circumstances. did you sign that, and how do you feel about it now? >> oh, i signed it and i absolutely believe we don't have to raise taxes now. we can get this country spending under control through frgual management and good effective management of this out of control government but we've got to deal with the crisis we face. we have to deal with the

political reality of the president's victory. so we'll wrestle with all of that as we go forward but i want to see and insist that this money be used to reduce the deficit if there is any revenue coming in. martha: i want to ask you this one more time. when you look at the statements by senator lindsey graham and senator sachs by chambliss who basically said i'm willing to revisit the tax pledge but only if we get real commensurate spending cuts, what do you think about that posture from them? >> well, lindsey's, he is a member of the budget committee which i'm ranking republican on. lindsey has said that before. this is not new. he believes and this is correct if we don't alter the course of the surging entitlements those programs are not sustainable. he is conditioning any tax increase fixing these programs, social security and medicare particularly, making sure they're sound for future. so that is lindsey's position. he has talked about

accepting revenue to accomplish that goal but only if that goal is accomplished with the new revenue. martha: it's interesting. the talk of compromise may in some ways to be sort of present that to the american people so when they go into that room, if they come out with nothing, they will all be held accountable. thank you so much. always good to have you, senator sessions. good luck to you all. >> thank you. bill: new year's eve is a monday this year by the way. that could be a loaded weekend as we round out 2012. martha: in more ways than one. >> the devastation of superstorm sandy was shocking in the days just after the storm. remember this? >> there was about a six to 8-foot dune at the end of this block. all of that sand and sand up and down the beach has now washed on to ocean avenue here. bill: well, how do things look today? a full month later. rick leventhal is back on the shore. what he has found today may surprise you. he is live there. martha: is compromise possible in egypt? a power grab by the new

president there, president morsi, has sparked huge violence over the course of the weekend. is egypt really better off under the new leadership and how could this affect stability in that entire volatile region? next, former israeli ambassador to the united nations dan gillerman joins us in "america's newsroom" live. [ male announcer ] if you're eligible for medicare...

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martha: well it will be a very happy holiday season for whoever wins the next powerball jackpot. the prize has reached a record $425 million, bill. did you hear that? bill: yes. martha: nobody matched the numbers in saturday's drawing. everybody was sleeping in. too much turkey. the odds of winning by the way? 1 in 175 million. hey it could be you. players say it is fun to imagine what they would do with all that money. >> what would you do with 425 million? >> give my job notice.

my fiance and i will plan appropriately, you know, and make sure our family is taken care of. >> pay off all my family's bills. and invest the rest. that is what we would like to say we would do but who knows, when you have that much money in hand. martha: who knows, right? a lottery spokesperson says the jackpot could get even bigger before the next drawing. sales increase ahead of the big, big prize. 175 million, bill. bill: i think that would make a terrific christmas. martha: you wouldn't notice it right away because we wouldn't allow it. bill: after a month maybe? once we get the finances in order. i give you a crack, a cut of it too. 200 million on the line after taxes. so, good luck, america. sees fire now is holding but there are major issues to solve in the middle east. president morsi grabbed more power. his detractors say they will challenge that in court. meanwhile anti-government protests are escalating as thousands pour into central

cairo slashing with supporters of the muslim brotherhood after president morsi granted himself unprecedented new powers. ambassador dan gillerman is a former israeli ambassador to the u.n., a fox news contributor. live from tel aviv. a bit of delay here. what comes from the disagreement in that country now, sir? >> well, good morning, bill, and one thing is very clear following your last segment and that is that the egyptian people did not win the jackpot. this is not what the egyptian people wanted. this is not why the young people went to tahrir square. they wanted democracy and freedom. they wanted jobs and education. got another regime which is really having a stranglehold on them and did this power grab. so i don't think this really bodes well for us. it shows the world i think what a tough neighborhood we live in and the fact that israel indeed is the only

true democracy in the region and the only ally that the united states can rely on. and i feel the egyptian people feel cheated today. i think the u.s. should feel cheated because this is what they got in return for ousting mubarak and i just hope that democracy and the young people of egypt who yearn for freedom will prevail ultimately. bill: morsi has the power now unless you pull another coup. he will do what he needs to do or feels that he needs to do in that country. it will be very interesting to see how that affects the border crossing in rafa, that area that goes from sinai into gaza which i know you have protested against for months now, suggesting that weapons are going into gaza. now on the issue of gaza and hamas, the sees fire appears to be holding. is there any suggestion that it will not, sir? >> well, it's been holding for a few days but we are holding our breath and we

are very cautious and very dubious about it because all it will take is one rocket from hamas to break the cease-fire because we will not take another rocket which will land in a kindergarten or a school and try and kill our children or our citizens. so this is a very fragile cease-fire and we do not trust hamas. we do not trust this terror organization which intent on destruction and bloodshed to keep its word. if it does, there will be quiet and the people of gaza may at the end have a life like the people in the west bank who are enjoying freedom and much better standard of living and quality of life. i hope the people in gaza want that as well. if they do they should make and hold hamas accountable and prevent it from any further terror activities and any further rocket shelling. bill: let me come back to hamas and gas is in a moment after we talk about the issue of iran.

senator mccain just said yesterday iran needs to be taught a swift lesson about arming hamas but even as those words are made public nothing seems to happen beyond more sanctions and more talk. will that change? >> i very much hope it changes, bill. i mean, i was talking about the tough neighborhood we live in and the real bully in the neighborhood is iran. iran is the main perpetrator, harborer and financer and generator of terror around the world. it is the sponsor of both hamas and hezbollah. hamas is truly just the bloody proxy of iran in the region. i hope very much that iran learned a lesson from the last confrontation because its proxy was beaten very, very badly. in fact iran is the main loser of this conflict. both politically and militarily. politically because the truce was actually brokered by countries who are very

bitter opponents of iran especially turkey and egypt while trying to regain the leadership not only of the arab world but of the muslim world. militarily again because their proxy was beaten so hard. they should realize this could also be just the preview to what awaits them if they continue ton on their nuclear quest or rearm the terror proxieses in the region. we will not stand still for it. we will not let it happen. i hope the international community led by the u.s. will not let iran rearm the terrorists in the region, destablize the region and certainly not continue on its quest for nuclear weapons. it must be stopped and should be stopped. if nobody else stops them we will. bill: back to gaza, hamas says you must lift the blockade around the gaza strip. will that happen? >> it will not happen as long as hamas is intent on destroying israel and on

shelling israel and wants the blockade to be open and lifted only because it wants to smuggle and bring in more arms into gaza. we do not want to punish the people of gaza. we have nothing against the citizens of gaza. in fact they are hostages of hamas and are put there in what hamas created to be the world's largest prison. in fact they're made to live over missiles. if you go to sleep with a missile, don't be surprised if you don't wake up in the morning. so we will be happy if there is real peace and there's real quiet to make the life for the people of gaza much more bearable and much better because i believe that higher their standard of living the lower the level of violence but first they have to get rid of that terror organization, hamas, otherwise their life will be horrible and we will not lift the blockade and risk the lives of our citizens just to make hamas happy. bill: dan gillerman, thank you.

mr. ambassador for your time in tel aviv. toe our viewers at home, hemmer@foxnews.com or a tweet @billhemmer because you asked, bya. there are still issues to be resolved in the middle east even with the sees fire in place and holing for today. thank you, mr. ambassador. martha: there are new warnings coming in from the white house about the so-called fiscal cliff. we're live at the white house. we'll bring you latest details on that. bill: do you know what today is today? it is cyber monday. martha: yes it is. bill: another american crafted day to get you to buy, folks. how did black friday do, lu? how did it do? martha: i helped. did you help? bill: not just yet. but what are economists expecting and will it help our economy. martha: with cyber monday. bill: just a tad. just a tad. ♪ .

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it was like they gave me my future back. tori's life is one of nearly a million changed by donations from people like you. send your love to the rescue. donate today. bill: got some breaking news here from the associated press. we're getting word from the u.s. supreme court reviving a christian college's challenge to obamacare. the health care overhaul with the acquiescence of the obama administration. the court on monday ordered federal appeals court out of richmond, virginia to consider a claim by liberty university out of lynchburg, virginia, that the health care law violates the school's religious freedoms. if our reading of this is right you will get more action on this stay tuned. we're in touch with our folks in washington. we'll bring you more updates on that. martha: it is hard to believe it has been a month since superstorm sandy hit

the east coast but one of the haddest hit areas was our beloved jersey shore. point pleasant beach you're looking at there the devastation was shocking in that area. our rick leventhal roid out the storm there. he joins us from point pleasant beach to see how the recovery is going. does it look like there is action four weeks later, rick? >> reporter: it is remarkable how much work that is left to be done here. the township has heavy equipment here picking up piles of debris from a oceanfront home that is boarded up. the whole front porch was ripped off by the storm surge. the dunes were washed away. the town rebuilt them sort of. they piled up some sand. there is still a lot of work to be done the dunes. we'll show you how much sand and debris is left on the sides of the road and sidewalk. piles of concrete. down the street, this is washington avenue, this was underwater. many homes have piles of debris in front of them as

we've been seeing up and down the new jersey and new york coastline. many homes don't have power. this is the white sand resort where we stayed during the storm. that is the room we rode it out in on the third floor. white sand tells us they sustained probably well over a million dollars worth of damages. they are reopened. they do have power back here. they hope they can be fully operational, including their oceanfront property by next memorial day, martha. martha: a lot of people are concerned next summer they still might be in the middle of all this. how about the rest of new jersey, rick? >> reporter: well, the damage estimates now are more than $29 billion just for the date of new jersey and that tally could go higher depending what they find as we continue to try to clean up the debris. we heard from pima that they paid out $248 million already. 230,000 residents have registered for assistance. fema says it has inspected 96% of the their homes. that means there are still thousands of homes that

haven't been inspected and still thousands ever homes without power four weeks after sandy hit, martha. martha: those folks are still staying with friends and in all kinds of difficult situations. rick, thank you very much for the update on the good ol' jersey shore. bill: 16 states challenging a key component of obamacare. why this could mean the taxpayers will be on the hook to foot the bill. we'll examine that for you. martha: a top republican senator says that ambassador susan rice is not the problem as the battle over her potential cabinet nomination intensifies. who senator mccain says is really to blame for rice's controversial comments from benghazi. >> what happened initially it was a spontaneous reaction to what just had transpired in cairo as a consequence of the video. people gathered outside the embassy and then it grew very violent. om a legal settlemt or annuity over 10 or even 20 years? call imperial structured settlements.

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moments ago the supreme court has new revived a christian college's challenge to president obama's healthcare overhaul. they ordered the court to consider the claim by lynchburg, university that his healthcare law violates the school's religious freedom. there were a number of religious institutions that were fighting back against the need to carry the obama healthcare law hol seehol sees, because they included contraception. it says it goes against their beliefs and they shouldn't have to carry insurance policies that include that. that question appears to be reopened regarding religious institutions and that will get a lot of attention. more details this morning when we get it. there are new warnings from the white house about the so-called fiscal cliff. a new report claiming this a failure to extend the tax cuts for middle class families could

have a negative impact on the economy that could outweigh the gains from black friday and cyber monday sales. that is a big concern as we head into the final quarter here of 2012. welcome after thanksgiving weekend to a brand-new hour of "america's newsroom." i'm martha maccallum. >> i'm bill hemmer. hope you had a great holiday, everybody, and you as well with your family. more republicans say they will consider closing certain loopholes in order to raise revenues if democrats compromise on some of the big issues. have a listen. >> to do this i want entitlement reforms. republicans always put revenue on the table, democrats always promise to cut spending. we never cut spending. i'm looking for more revenue for entitlement reform before the end of the year. martha: how do you get that rev few? that is the big question here folks. doug mcelway joins me live from the white house with more on this. it sounds like the white house report is just not warning abouo

putting tremendous pressure really on congressional republicans, is that true? true. it's putting tremendous pressure on congressional republicans. the report in fact in some ways preemptively blames congressional inaction not white house inaction as to any tax hikes that would affect americans if we do indeed fall off the fiscal cliff. take a listen to a little bit of this quote from the white house report that came out just a morning. quote, this congress doesn't act middle class families will see their income taxes go up on january 1st. the typical mid class family will see their income tax go up by $2,200 next year negatively impacting businesses and retailers across the nation. most republicans are resisting all efforts to increase revenues either through taxes or through closing loopholes. senator john mccain is typical of that resistance. listen up. >> because every economist that i respect says that if you raise tax rates at this time, in fact

the president even said that a couple of years ago then it harms the economy. we are trying to help the economy. unless i can be convinced that raising tax rates will be beneficial then i believe there are reasons and grounds for my position. >> a handful of republicans have signaled a willingness to break their bridge to raise revenues. they include a senator from georgia. as you've said senator lindsey graham from south carolina, representative peter king of new york. king spoke out on "meet the press" yesterday about his change of heart. >> if i were in congress in 1941 i would have signed the declaration of war against japan, i'm not going to attack japan today. the world is changed and the economic situation is different. ronald reagan and tip o'neal realized that in the 1980s. i think everything should be on the table. i'm "posed to tax increases. the speaker, the majority leader

and president will be in a room trying to find the best package. i'm not going to prejudge it. >> reporter: king added that we should be taking iron-clad positions in these negotiatings. martha: and all of these people did so in terms of opening the book on tax increases saying only if they get commensurate spending cuts which may not be far from where they were before. bill: we will put all these questions to eric cantor live in new york here in studio to talk about the discussions over the fiscal cliff. we will eye talk about taxes and revenues and the entitlement programs too that are so important. stay tuned for that. there are new reports that the obama administration is getting ready for the future in u.s. troops in afghanistan when formal combat ends in 2014. at a moment it's a plan that could depend entirely on afghanistan's own approval. kelly wright live in washington. what about the new plan and how many u.s. troops will be involved in a support role for

afghanistan, kelly. >> john allen the command tkefr u.s. and international forces in afghanistan is focused on keeping 6 to 15,000 troops in afghanistan for training and counterterrorism operation. there are still several options being discussed among american and ally military planners. there is a preliminary plan that's called for 10,000 american troops and several thousand nonamerican nato troops that may add up to the same thing that general allen has. their primary job after combat operate rations in december 2014 will be to provide support to the afghan military. also an american counterterrorism force of less than a thousand would continue operations throughout the region with a particular focus on al-qaida. a final decision on this still needs to be made by the united states and nato and of course afghanistan. the army chief of staff depends some decisions to be made next month, bill. bill: some american troops are already serving in a support role as would he know. what is their on i hav

objective as they get ready to end combat operations. >> as we've seen in iraq this is a very critical component and winding down of combat operations. the u.s. and in it tow knows that afghan troops maybe ready to conduct successful military operations. this group is called security force assistant brigades, they are expected to help the afghan national security forces stand up in taking the lead role in defending their own count me while american and nato forces begin to stand down. the size of these pwa grades will be half of what they are now instead of the usual brigades of 4,000 soldiers. the new bra grades will have roughly 2,000 forces when combat ends in 2014. leon panetta said last web the united states has made it clear to afghanistan that it will maintain an enduring prossence and a long-term commitment to afghanistan security. naturnato has made a similar

agreement. they say any troop presence beyond 2014 will recall approval from afghan president hamid karzai. bill: it will be interesting to see how it all goes or leads to more progress or lack of it. kelly wright live in washington. thank you. martha: israel is testing a new missile defense system as a familiar enemy promises a major rocket attack if they are provoked. this latest defense system is known as david's sling, it's israel's third attempt. and it's similar to the iron dome system. news of the test comes off he hezbollah promised that thousands of rockets would reign on israel if it attacked lebanon. >> police are investigating a black friday brawl that had a lot to do with more than a good

bargain. you see that guy in black, we are hearing the fight at this reportedly upscale mall was possibly over a sale on underwear. other shoppers scattered as the violence spilled over the mall barriers, this in california now. witnesses say thing could have ended much worse if security officers had not stepped in when they did. martha: craziness out there, crazy, look at that. the lines stretched around the block but last week's black friday sales president bush actually down from last year. there may be some redemption for the retailers today, they wait for the cyber monday sales to come in and those are expected to be the highest weave over seen. online sales are expected to top $1.25 billion and hit $1.5 billion today alone. we'll see if it meets those expeck lacings. on thanksgiving day this year the boost seems pretty likely. adam shapiro is live in phoenix, arizona with more on this for

us. morning, adam. >> we are at the amazon.com facility, the fulfillment center here in phoenix, their largest out of 40 in the united states, 80 world side. 1.2million square feet. take a look, you can see the activity of the pickers, they are called. these people are unpackaging the items you've already ordered, they put them into bins that go into the other section of the fact free where other pickers put them into another bin where they get sorted into the box. i'll show you. frank, come with me. watch out for for that cable down there. the key to cyber monday you mentioned the 1.5 billion to $2 billion, that american consumers will spend just today buying goods. it's going to be a 96 billion-dollar holiday season online according to the national retail federation. 500le $6 billion in all of holiday shopping. the cyber portion of that is growing. at amazon.com they will fillmore

than 204 orders per second just today. last year cyber monday was their biggest day. they are expecting this cyber monday will exceed last year. to put it into numbers we can all expect their revenue last year in the fourth quarter is expected to grow this year to anywhere from 20 to $23 billion. so as i leave you i'm going to give you one last shot of the 2,000 men and women who are working here in phoenix, just one of 40 fulfillment centers that amazon.com has. to give you another idea of how big a day this is, they've hired not only here in phoenix but nationwide 50,000 seasonal employees to help fill all those orders. this place has been going 24-7. and they are going to fill your holiday wishess. martha. martha: it looks like santa's workshop except all the elfs are wearing yellow. if you see any of my stuff going by there, just grab it and bring it all home. >> there is a lot of cool stuff going by. i wish i could. martha: i guarantee i have some

stuff going down there. bill: new questions about president obama's healthcare law, more than a dozen states say they will not implement one of its key provisions. how that could affect the entire law and how you could end up paying for it, details on that. martha: shocking allegations of police negligence during the casey anthony murder investigation. what key piece of evidence florida detectives say that they blocked. bill: that is an amazing story there. also press president obama his cabinet is ready for a shakeup after the whole libya mess. the president said to be considering you susan rice to replace hillary clinton. why john mccain says he wants to talk to rice, hear her out and why he says she is not the problem. >> i give everyone the benefit of explain their position, and the actions that they took, and i'll be glad to have the opportunity to discuss these issues with her. [ male announcer ] when was the last time something made your jaw drop? campbell's has 24 new soups that will make it drop over, and over again.

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martha: there is a growing

debate over reports that u.s. ambassador to the u.n. susan rice could be nominated to replace outgoing secretary of state hillary clinton and that could happen as early as this week. we may get a few of the cabinet announce -lts this week, we're learning. rice famously failed to call the death of four americans in libya a terrorist attack in the days that followed despite the fact that many members of the administration seem to acknowledge that. senator john mccain is now saying that he believes that rice herself is not really the problem here. >> she deserves the ability and the opportunity to explain herself and her position, just as she said. but she is not the problem. the problem is the president of the united states, who in a debate with mitt romney said that he had said it was a terrorist attack. he hadn't, in fact that night on 60 minutes he said they didn't know what kind of an attack it was. martha: others are not quite as convinced, our own kirstin powers says if the president does nominate rice he does it at his own perfectly.

>> i think if he does it could be -- that kind of irgans, which is what i think it would be could be his undoing. if she is put under oath and forced to go through and answer all these questions about benghazi i think it's going to put the administration in a really bad position. martha: joined now by kirstin powers, daily beast coltph*eus and fox news contributor. tone see zag is a press grade to jack kemp and the president of talk news service. welcome back to both of you after the thanksgiving weekend. an interesting comment you made kirstin and it got a lot of attention over the weekend. you want to elaborate on why you believe it would be arrogant? >> originally i think susan rice has always basketball th been the president's first choice. she goes all the way back with him. i know he wants her to be secretary of state. after the benghazi debacle i heard more it would be john kerry because a lot of people rightly recognized that sending

susan rice up there would turn it into a benghazi circus where everyone will want to be talking about benghazi. we had the press conference where the president, he's clearly very dug in on this. when i say it's arrogant, it's clear that he has just either complete contempt for the media, or just believes that he can just do whatever he wants because the idea that he would send her up there, put her under oath and have her be forced to answer these questions, and i think mccain is right, it's not about susan rice it's about the president. but he's going to put her in the line of fire. i think it just shows arrogance. it's him basically saying, look we clearly misled people, nobody seems to care so i'm going to just send her up there. martha: do you believe he intends to do that, that nothing has changed or he's been emboldened in recent weeks? >> i really read that press conference to mean he's going to nominate her. i've asked around, i don't think anybody knows for sure, but why dig in that way if you're not going to nominate her.

martha: unless you want to say you defended your friend and ally and that you decided to move on because you don't want to subject her tow that because people like kirstin powers and others are telling you it's not a good idea. we'll see what the president says about it. with regard to john mccain, tony, why do you think he has changed his tune on this event? >> i don't think it was that hard a change on mccain's part. he's absolutely right as is kirstin, barack obama and others are certainly more at the center of the benghazi situation than susan rice. she was inserted there, she became some sort of accomplice or accessory to what some say is a cover up. if president obama's design was to have susan rice be his secretary of state he wouldn't have put her in such a precarious situation. i've heard bi-partisan people all agree there's been very little transparency on the benghazi issue. there are questions to be

answered. we are not suggesting it is a cover up but we don't know that it isn't. suitsusan rice is mixed in the middle of this. by putting her up as secretary of state he introduces a problem which he doesn't have right now, a very deep investigation on benghazi other than by fox or objective people like kirsten on the left. martha: it goes to the pe of whether president obama is feeling so emboldened by his re-election and whether or not he believes that everybody who rejects her or gives her a hard time is doing so as some on the left have raised based on the fact that she is a woman or she is african-american. those suggests suggests suggestions i find so offensive. this is a woman who was approved, unanimously, or very strongly for her united nations position. to suggest that anyone is judging her on anything based other than on her record i think would be a big mistake, kirsten, i don't know what you think about that.

>> clearly they've decided that that is the line of attack that they are going to take. have you have people like james klyburn, he's hardly a bit player,aying senator mccain is basically a racist for opposing her. it's demeaning to her. and she is a rhode scholar, a high ranking official even in the clinton administration. it's very demeaning to her to even do this. i think it's been set up that way. my point earlier was obama is emboldened by seeing that the media is just so complacent or stupid or whatever it is that they will not put together the pieces of how this story does not add up. it's so -- there are so many problems witness, but he thinks he can send the person up who he had be the face of benghazi, put her under oath and that it's not going to make any difference, it's not going to cause any problems for him says something either about his arrogance or about what he knows and what he knows is that the media is just going to play along with every story he tells them to play

along with. >> martha, there is a lot he has to decide here. he has limited political capital. even if he has some, which i think he certainly does, does he want to invest it all on this one controversial nomination, not the fiscal cliff and other things. martha: if he does it will tell us quite a bit and we'll see, maybe as soon as this week. thank you very much. >> thank you. >> thank you. bill: we are up to 16 states that will not set up a major provision of the healthcare law, and if that is the case, what happens to the rest of the law, and how you will be paying more of it than you even thought before, terrific panel on that. martha: as congress approaches the deadline for the fiscal cliff house majority leader eric cantor joins us live in "america's newsroom" to talk about the deadline, the negotiations, the concessions, what is this going to look like? we'll be right back. i need to rethink the core of my portfolio. what i really need is sleep. introducing the ishares core,

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bill: now we have new questions about president obama's healthcare law. 16 governors refuse to set up state-run health insurance exchanges instead forcing the federal government to come up with a system instead. what does that mean for the law? steven moore senior economic writer wall street jr. matt mccall the president of penn financial group. gentlemen, good morning to both of you. steven let's start with you. what does it mean for the law. >> you said it's 16 states, you're right. it is 16. i'm predicting we'll be up to about 20 states that say we don't want a part of this law, we are not opening up these exchanges which is really the backbone of the obamacare law. interestingly enough i talked very recently with rick scott who is the governor of florida and he just said, steve we can't afford this. we are already having a problem balancing our budget here in florida. you've got to realize that medicaid plus obamacare is not just going to bankrupt the federal government it's going to bankrupt these states too. it's a financial concern that

these states have, bill and what they are saying they want is just let us have an opt out and set up our own system. we will provide health insurance for all our citizens but we can do it at a lot lower cost. bill: let me go back to the opt out. i want to get matt in here. if the states don't do it the federal government does it for them and that costs money too does it not. >> it cost a ton of money. they set up $1 billion to get them set up by january 1st, 2014. the way it's looking 20, possibly more opting out of this this leads to the federal government having to step into individual states to set up the exchanges. it costs a ton a money well above the one billion dollars, who pays for that, you and i the taxpayers. bill: the one billion dollars is. >> it was set aside through obamacare to set up the exchanges. if it goes above that that will be more of a tax let's call it on taxpayers to set up the exchanges and they'll never get it done within 13 months from

today. basically. to me this is a big, big problem. bill: we sit back and try to figure out where it goes. the law does allow the state to opt out. 16 states say they will not set up exchanges. a lot of them republican governors. five states will pursue a federal state partnership. four others are considering that partnership as well. steven back to the opt out option. >> it's still somewhat undefined. a lot of these states want essentially a waiver from the law that would basically allow them to set up their own system where they would provide hint shaourpbhealth insurance for every citizens of their state. i've talked to four or five republican governors, they say we are absolutely certain we can do this and at much lower cost than this federal contraption of obamacare. that could set up kind of a constitutional crisis here where the federal government and the obama administration says we are

not going to allow to do that and the states say this is a state's issue and we may see this headed back to the supreme court again. bill: woe. you know, we are going to be talking about this thing for years. it seems like every week there is a new wrinkle in this and a new adjustment in this. i wonder, then, if 2014 comes along and your big point is that the government doesn't have enough time to set this up, do you then get an extension of the law? do we continue to push it down the road before it's fully implemented? >> i think what happens is by 2014 we real lie, the americans,ette voters that this is a complete mess. the people who don't already know that it is a mess. then from there you basically may choose to repeal it eventually. i think eventually it has to get repealed. it was pushed through so fast not thinking about the ramificationses such as this. this is just the states opts out. when the federal government goes in they have to go to each individual state. obesity levels are higher in the south they have to set up

different exchanges down there. i think honestly it ends in repeal. >> it's amplified because of the fact that not only do the states want to opt out. a couple of weeks ago as we talked a lot of the employers are saying we'll just pay this fine and we'll put all our workers into the government system. bill: that will be really interesting. steven hold onto your initial comment suggesting that more than 20 states may opt out in the end. steven thank you, matt thanks to you. we'll try and get these governors onto explain their position as we move through it. thank you, gentlemen. martha: there is a bombshell in the casey anthony case. the new evidence that a jury never got to take into their consideration before they found the young mother innocent of killing her daughter, caylee. bill: also, there are tough negotiations behind the scenes we're told happening now but they are going to come full circle soon about the fate of the country's economic future. eric cantor is in the house.

he will weigh in on the fiscal cliff and whether or not washington will get a deal. >> i don't want to prejudge any of this. listen, bottom line is we can't have sequestration, we can't go off a fiscal cliff. we have to show the world we're adults. the election is over. two years ago, the people of bp made a commitment to the gulf.

bp has paid over twenty-three billion dollars to help those affected and to cover cleanup costs. today, the beaches and gulf are open, and many areas are reporting their best tourism seasons in years. d bp's also committed to america. we support nearly 250,000 jobs and invest more here than anywhere else. we're working to fuel america for generations to come. our commitment has never been stronger.

martha: it's 33 minutes past the hour now. time for a look at some of the headlines we are looking at this morning. a shocking find at the macy's thanksgiving day parade. a college student reportedly found social security numbers

and police reports on the strips of confetti that were range down all over the parade. there is an investigation into this underway. it is an incredible story. plus, officials are warning people in the north of england and wales to proceed pair for flooding. nearly 3 inches of rain is expected in some places that are already very hard hit by severe weather. a chinese company reportedly planning to build the world's tallet building in just 90 days. broad sustainable buildings has workers prefab ra indicating blocks of the building and will add up to five floors a day. that would be something. bill: good luck with that. the time laps on the computer will be interesting to watch. lawmakers getting back to washington, to work with only weeks left to reach a deal on the fiscal cliff. 35 days, people. this is as more republicans say they will consider tax changes to cure the federal deficit if democrats consider entitlement reform. eric cantor, virginia

congressman, house majority leader good to see you. hope you had a good thanksgiving. >> very nice, nice to be here. bill: put all other stuff to the side, can you say right now whether or not there will be a deal on december 31st? >> i sure hope so. because we know the law is after that point, come january 1, 2013, taxes are going to go up for everyone. it is not just going to be what the president wants to continue to say, in terms of raising taxes on the wealthy, it's everything. so we know that that will happen, we don't want that to happen, that is a punishing strategy, we want to try and avoid going off the fiscal cliff. and i hope that, you know, my counterparts on the other side of the aisle will join us, and that the president will step up and make this sure this doesn't happen. bill: that with us not a yes. that was a maybe. >> again, there is a process at work, but, you know, in washington it's the white house, the house and the senate, i think that pretty much on our side of the aisle and in the house we wanted to make sure we don't go over the cliff.

what you hear from folks like patti murray, the incoming chairman woman of the budget committee in the senate is she thinks we ought to go off the cliff. that is sort of what we're dealing with right now. i hope that reasonable minds will prevail and realize that taxes are going up on everyone and we don't want that to happen. it's not good for our economy and hard-working taxpayers of this country. bill: the door appears to be cracking at least on the right when it comes to revenue, not tax rates, but tax revenue. here is peter king on that. >> president obama won, he won fair and square. we won the house, we won it fair and square. democrats still control the senate, slight edge to the democrats. bottom line it's over with, find a way to resolve it as much as possible between now and the end of the year. bill: what they are talking about again is house revenue. mitt romney campaigned on it. >> john boehner went to the white house ten days or so ago and put revenues on the table,

and, again, we don't think that raising tax rates is something that is good for this economy, that will help grow jobs. and so what we have said is there are ways for the federal government to have more revenue if we grow this economy and engage in tax reform, that is the proposal we've got on the table. let's remember what all this is about. you could put taxes at 100% on the wealthy and not solve the problem of the spending. we have got to get to the problem and stop digging this hole in terms of spending money we don't have. you're running a trillion dollars of deficit every year plus that is the proposals we put on the table to stop that, we're looking at the president to come forward with his ideas on that. bill: not just the president but you're looking at democrats in congress, be it the house or the senate. where are they willing to give when it comes to entitlement reform on medicaid, medicare and possibly even social security? >> that is yet, bill. that's what we've got to see from nancy pelosi, harry reid

and the president. where is their proposal to actually fix the problem? because raising taxes is not going to fix the problem. we've always believed that raising taxes is going to be harmful to a small businessman or woman in creating a job, and, you know, i tell this story about a cook that i met in an airport. when he told me he came up and says,ase do something about the problem in washington, we need more jobs. he said i had to take a cook's position because i couldn't find a job that best met my skill set in the construction industry. i want to go and find that job to make the kind of money that i feel i'm worth, but if you raise taxes on the small businessman or woman who is creating that job that is creating less of a likelihood that you're going to create the job. bill: you have to dance now and you're trying to thread this needle the difference between raising tax revenues and tax rates, there is a distinction i get it.

do your constituents get it? are they going to look at you and say, hey you guys caved. >> i think at end of the day they elected and reelected a house majority based on trying to resolve and fix the problem. right now the problem still remains unemployment is too high, the growth rate in this economy is too slow. how are we going to fix that? that's what the folks at home are looking at. they are not clambering to say, hey, let me pay more money into washington, especially if washington can't get a hold of the underlying problem on the entitlements and the unfunded liabilities in these social security and medicare, medicaid programs. bill: this caught my eye from last friday, i do believe. house speaker john boehner writing in the cincinnati inquiry the president's healthcare law adds a massive expensive unworkable government program when the national debt exceeds the size of our country's entire economy. that's why i've been clear that the law has to stay on the table as both parties discuss how to

solve our nation's massive debt challenge. in these negotiations is obama care being negotiated? >> if the president is serious about joining us and fixing the problem he ought to be putting obama care on the table, there is no question in my mine, that is the largest expansion of government programs that we've seen. bill: can you say at the moment that that is being talked about? >> all i can say is that the president has got to get serious and the speaker is correct, that obama care is such an expansion of government spending and involvement in folks lives it ought to be on the table. bill: you wonder what he is willing to concede on that. that would be a very interesting conversation. there are articles written every since the election the president has more clout now. do you see it that way? >> i think, look, you can also see the fact that we reelected as majority in the house. we also have a say in all this. and obama care remains wildly unpopular. and it's wildly unpopular because i think people understand they don't want

rationing by some bureaucrat in washington so far as our healthcare is concerned i. think most persons want healthcare that is patient centered between them and their doctors. when you look at obama care and what we can see about making that law go away there are some provisions in there. there are taxes on a medical device industry that caused people to lose access perhaps to certain kinds of treatment that will actually provide a lot of harm to job growth in a very growing industry in this country in the medical device area. there is also this thing called the independent payment advisory board that is the essence of washington controlling all that healthcare is about in this country. there's bipartisan support to do away with that. will the president sign it? yet to be seen. bill: eric cantor thank you. we are going to work through this for the next 34, 35 days and possibly beyond. so we'll be in touch with you and many others. eric cantor thank you. martha. martha: so, as president obama mulls a number of things, including the fiscal cliff he also has to make a decision

about his new secretary of state. condoleezzaa rice has a warning today that the middle east is quickly slipping away, and that it's all being engineered by iran. that stark assessment from her is getting a lot of attention this morning. [ malannouncer ] it'that time of year again. time for cii price rewind. because your daughter really wants that pink castle thing. and you really don't want to pay more than you have to. only citi price rewind

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martha: as president obama mulls the decision for his new secretary of state, the former secretary of state condoleezzaa rice has issued a very stark warning to the president and to the world. in a new opinion piece she suggests that the situation in syria shows really the last chance for stability in the region, that it all really may be slipping away. writing in "the washington post" she says this. quote, the civil war in syria may well be the last act in the story of the designificant congratulations of the middle east as we know it. the opportunity to hold the region together and to rebuild it on firmer foundation of

tolerance, freedom and eventually a democratic stability is slipping from our grasp. she is arguing for stronger leadership at what she sees as a pivotal moment in middle east history. i'm joined by steve haze, wire for "the weekly standard" and fox news contributor. good to have you here this morning. i think this piece is well worth reading for anybody who wants to understand what is going on in the middle east right now. she's basically arguing that these nations that were sort of cobbled together mid century on the british and french are really just loose conglomerants of different religions and they are a majority shiite and that is not lost and iran, shall we say. >> right, i think her assessment of the situation is exactly right. it's important i think to take a step back, as she does in this piece and look at what we're seeing sort of from the 30,000-foot view. you've got iran manipulating all of these pieces throughout the region, whether it's in iraq,

afghanistan, certainly in syria. you've got what we've seen over the past several weeks in the middle east, iran is clearly playing a central role and the question is will the united states act and act decisively to counter act that iranian influence. >> the question is now. i think of senator john mccain who has long advocated a much stronger approach in syria, and condoleezzaa rice suggests that we've misread what is happening in syria, that it is not just a humanitarian disaster, that we need to sort of decide whether or not to help in, but it's really a lynchpin. >> yeah, i would argue both. there is no question that syria has more strategic importance than say libya and elsewhere. if you look at the rhetoric that the president used back on march 28th, 2011 where he called for u.s. intervention as part of a coalition in libya, he framed it as a choice about humanitarian intervention, is the united states going to standby and sort of shrug off

our moral responsibility to help the people of libya, when as many as 6 or 7,000 people would die if we didn't? now you look at syria and you're talking about numbers that eclipse that by 5 or 6 times that amount. i think it's both a humanitarian crisis and there is a moral obligation for the united states to lead because of that, but it's also very important obviously from a strategic point of view. if you have bashar al-assad as one of the closes allies with the iranian regime and you've got them manipulating all of these pieces, to state and nonstate actors alike trying to spread their influence throughout the region, that's what they are trying to do. martha: it's two ways of longing at it. if this waive looking at it turns out to be correct turning a blind eye to it in anyway is going to turn out to be a great historical mistake. let's look at one more quote from this piece that condoleezzaa rice penned. she said today's karl marx is iran. it is the spread of interests

influence among shiite's uniting them under the flag of teheran. destroying the integra see of bahrain, saudia rabe, eye kabg and lebanon. >> that with us a very interesting argument that she said relating it to obviously her area of expertise is russia. it felt to me like this piece was almost fatalistic. she is calling for more american help, she is calling for a greater american leadership role but it sended to me, read to me like she really didn't expect that to happen. in that sense i agree with her. if you look at the campaign we've just been through the president of the united states and his vice president ran on a campaign that embraced this idea of leading from behind. they believe this is working, they believe this is successful. i think the opposite, it seems very clear that secretary rice believes the opposite. i don't think that we are likely

to see the united states take a more significant role in the region any time soon, given the way that the president and joe biden ran for the past year. martha: there may be an irony in the fact that susan rice, who is being considered as the next secretary of state, you know, sort of failed to see the broader picture in what happened at benghazi and we wonder what the direction of the next secretary of state would be. i just put that out there for all of us to kind of think about. thank you very much. >> or chose to fail to see the broader picture. martha: that may be the case. steve thank you so much. always good to talk to you. bill: ten minutes before the hour, jon scott standing by. hospitals rolls your way. hope you had a good turkey. jon: i sure did and i cooked it bill. bill: well done. jon: a surprise order today from the supreme court. we will continue to cover the breaking news. could it mean obama care gets a second look from the nation's highest court. new softening in the arguments against tax hikes as we approach the fiscal cliff. you just heard eric cantor on

that. what it could mean to your tax bill. plus hillary clinton gets some glowing coverage in the main-stream media, fair & balanced? we'll debate it. a record-setting holiday shopping weekend as we embrace cyber monday all ahead "happening now." are you receiving a payout from a legal settlement or annuity over 10 or even 20 years? call imperial structured settlements. the experts at imperial can convert your long-term payout into a lump sum of cash today.

bill: was a key piece of evidence overlooked during the casey anthony trial? apparently a computer search was not fully vetted and that has some people asking whether or not justice was bungled. phil keating is live in miami. this computer search happened on the last day that little caylee was seen alive, is that right. >> reporter: that's right, bill, june 16th, 2008 a critical day in this case. the day casey anthony claims her daughter caylee meandered into the backyard swimming pool and

accidentally drowned. investigators now admit on that date somebody searched full-proof suffocation misspelled inside the anthony home. both case tee and her father george were at home that day. prosecutors did not have that evidence at trial. they say they wish they had. the orange county sheriff's office now admits that they did not do an entire computer search inside the anthony home, it only searched for specific words. bill: if that's the case could have that changed the out cox the trial at all, phil, do we know that. >> reporter: a lot of people are wondering about that. most likely no. a few jurors who did speak publicly after their highly controversial not guilty verdict, they felt after the trial there was just as much evidence that little caylee accidentally drowned as there was that she was perhaps well suffocated and filled. defense attorney jose baez tells me this morning, quote, i believe the cops knew about this but they buried it because it destroyed their case.

if she is on the computer then she did not leave the house at 12:50. jose baez actually wrote about that in his book that came thought summer, and only george and they ao claimed casey took caylee out of the house at 12:50 even though the search for full proof suffocation happened a full hour after that. bill: thank you phil, in miami today. martha: a critical meeting going on in egypt today after president mohammed more see givemorsi gave himself new could this push the country further into chaos?

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